of the questions you've raised, how do we control costs, how do we make sure this meets historic standards. >> thank you. and then one other question i do have that i hope that orton will be able to address as well, we have spoken to a number of proposals and some of them have actually left san francisco, especially ones that would utilize this kind of space. they left to go across the bay. not necessarily because it was cheaper there, but because they found out that the facilities were actually better suited to being flexible, being adaptable to what they needed and a lot of them were just newer facilities. and, so, i just wanted to understand what we're doing here is creating a shell and we're not really putting much else in there? i'm just wondering how competitive we would be across the bay. >> right, i'm going to let odi team answer that because how to meet the market needs and what the tenant needs is very much what we draw from our public-private partner. mr. eddie orton.

>> good afternoon. answering that question, the -- we deliver generation infrastructure so that industrial tenants can basically come in with their equipment and specific design, so they can manufacture efficiently. the design process is pretty simple. it's, you know, in/out in process. it's pretty much a very accepted way of approaching industrial space. and we have spent a lot of time looking at these buildings so that we can deliver that 20% [speaker not understood] infrastructure that will keep and attract users. does that answer your question? >> sure. >> i mean, specifically, i

mean, we're talking about, you know, large quantities of power, large quantities of data, data moving capability, cleanliness, docks, driving doors. what attracts tenants is productivity. so, if somebody can come to a space and be productive, they'll obviously make more money. that's what attracts canxv. -- companies. that's what's driving the design, industrial productivity and that's what we do. >> the shell that is delivered would include the power sources, the electrical conduits, all the things that are necessary that large -- individuals or businesses who are looking for large space for production are also looking for, these are things that would be part of the shell that is delivered? >> exactly, the generic part we finish, lighting and things like that. and specific parts needed for individual businesses, then we'll come in the next level.

>> thank you. >> just a follow-up question. if you could tell us orton's experience and history of doing -- looking at other properties and where you've done your work. >> sure. this project is sometimes charged as a 270,000 square foot project. in actuality, it really is seven separate projects, seven different types of building construction. so, going into that, one type would be similar to the office building. the first one we saw, the building 101, the l-shaped building at the corner of illinois and 20th, that's a concrete building. office building, rehab. probably the most really typical building that with just

completed in oakland is a 10-story mid rise, 1440 broadway t. was well reported in the news because unfortunately right after we bought it, the [speaker not understood] destroyed the building and it's right there occupy oakland. and we've come back and built that. we had that building to its historic pinnacle and it's absolutely beautiful. our lead tenant in it is a company, well known company in the east bay called oaklandish. that is a design company. well known design company. so, the two office buildings, 101, 104, 114 broadway is very similar. we're right in the middle of a rehab in cincinnati, ohio, a brick building very similar to that one -- to -- this is also going office light industrial. i would say 1440 would be the best nearby example of the 101 and 104-type building.

the two buildings that are subject to the advisory of imminent collapse which is 113 and 114, that would probably be like the last slide, which was the 4-point project in richmond, california. that building won the national merit award, which is one of the highest architectural awards in the world. and that building was probably in slightly worse shape than 113, 114 is currently. very large space, high ceilings, state of near collapse. it will be a very similar project. totally, we've done about 73 projects, totaling about 20 million square feet. so, this one at 271,000 would be about, you know, 1 to 2% of

our portfolio. >> thank you. >> we would obviously be thrilled if you had the time to tour and show you, really, there is another building, 14, the metal building, we just completed a project in berkeley that's virtually identical to that building. so, we do have the experience. and each building type. i would repeat this is a very difficult project. i mean, that's the bad news. good news is what we do is difficult projects. but i agree, endorse what you said at the beginning, which was this is a tremendous asset to the city and we're very appreciative of the opportunity to develop it. >> thank you. >> thank you. why don't we go to the budget analyst report. >> madam chair and supervisor avalos, we have our conclusions shown on page 18 of our report.

and we state that based on the term sheet provisions, the budget and legislative analyst estimates that the port would receive revenues over the 66-year term future ground lease or an estimated value of $15.7 million. we also report that the estimated net present value of rent revenues in the port would be less than 15.7 million if project costs are higher or tenant rents are lower than estimated in the preliminary pro forma financial analysis. orton is currently conducting a detailed evaluation of the 20th street historic building site and developing a more refined sign plan and cost estimate of the project. the proposed term sheet requires orton to submit a complete underwriting package with detailed estimates of the total project cost, financing costs and expected lease rates to the port to be used for

negotiated a lease disposition and development agreement. we also report that the pro posetioned 20th street historic building project would yield annual estimated tax and fee revenues to the city of an estimated $9 19,000, generate an estimated 500 new permanent jobs, provide an estimated 58.5 million in construction expenditures. be financed by $14 million in [speaker not understood] developer equity by orton with a 14% return in investor equity. 1.5 million in available port funds and 43 million in federal historic preservation tax credits and loans to be obtained by the developer. would incur no [speaker not understood] maintenance and operating costs to the port or the city and would incur no debt load to the port or to the city. we do find that hadth proposed development to be fiscally feasible under chapter 29 of the city's administrative code. we do have some recommendations

on page 19 of our report. as i understand t madam chair and supervisor avalos, these recommendations are included in an amended piece of legislation that you have received. our recommendations are to amend the proposed resolution to require that the 20th street historic building project meet [speaker not understood] interior standards. [speaker not understood], that you amend the proposed resolution to require that the port report to the board of supervisors when the board considers the project's ground lease. on the revised cost estimates, project financing and pro forma financial analysis as well as the port's procedures to control and verify costs. would also recommend that you amend the proposed resolution requesting any reopeners to the proposed ground lease, [speaker not understood] changes the financial terms of the agreement subject to board of supervisors approval and we recommend that you approve the resolution as amended. >> thank you very much, mr.

rose. and just to further elaborate on the recommendations, the three that are recommended by the budget analyst, looks like the department is in agreement with that and actually has provided language to that effect. and i do want to read those items or that language into the record. what it looks like is an amendment on page 4 beginning on line 16 would read, further resolve that any ground lease negotiated between port and [speaker not understood] 20th street buildings require comply with the interior standard, [speaker not understood] rehabilitation of the 20th street historic buildings. and be it further resolved that at the time the board of supervisors considers whether to approve a ground lease for the project pursuant to charter section 9.1 18c, port report back to the board of supervisors on the project's one, revised cost estimates, project financing and pro forma financial analysis, and two, port's procedures to control and verify project costs and be it further resolved that if the board of supervisors approves a ground lease for the project,

any change to the financial terms of such ground lease after such approval, that materially decrease the benefits or otherwise materially increase obligations or liabilities of the city or port is subject to prior approval of the board of supervisors. so, that would be the amendment that is proposed. that dozen corporate the budget analyst's recommendations. so, just one final question from me before we do take public comment. in terms of the financial liabilities from the port's perspective, what we're seeing potentially is only, if i can itemize t the $1.5 million that is currently already in the port budget. that is one piece of it. two is a grant that might be coming in the future of about 250,000. this is a grant that you mentioned that may be coming, right? >> [speaker not understood] if we do this project. >> so, potentially the grant funding of 250, not port funding. finally the other financial component that the port would contribute is basically a rent c. looks like probably is it a

66-year lease on that site where the rent credit would help pay for the expenses. and is that sort of the totality of all of the financial liabilities from the port? >> we're not explicitly calculating it as a rent credit, but we're foregoing any rent because there isn't any rental value for the initial term. >> right. so, it's basically the rent that they would not have to pay for the first few years to utilize the site. >> right. >> okay. thank you. why don't we go to public comment on this item. do we have members of the public who would like to speak on item number 7? [singing] oh, budget committee, i guess you're wondering how i knew to keep these buildings old and not make them new and you took me by surprise

what i see from these feasibility ayes and then i heard it through the city grapevine * i know these tears i can't hold inside is but and then i do want the price to be right you could have told me your city selves that you had so much wealth instead, i heard it through the city grapevine. oh, and i wish i had a dime instead, i heard it through the city grapevine >> thank you very much. any other pers? good afternoon, members of the committee. my name is mike bueler, i'm executive director of san francisco architectural heritage. i'm also a member of the central waterfront advisory group and participated on the

revie panel that selected orton as the developer for this project. i'll be brief in my comments. obviously the 20th street historic building are among the city's most significant historic buildings, particularly industrial buildings. they're also in equally urgent need of repairing stabilization. it is with tremendous excitement that the preservation community anticipates this project after so many years of self-starts trying to find a developer and a concept for this to move forward. heritage looks forward to working with the developer closely as more detailed plans are developed for the retrofit of these buildings. and today we just urge you to approve and endorse the term sheets so the work can proceed as expeditiously as possible. thank you. >> thank you. good afternoon, supervisors.

my name is karin woods. i am co-chair of the port central waterfront advisory group which started out more than ten years ago as the pier 70 advisory group when we were struggling to figure out how to keep these fabulous buildings from falling down. it's been a long process. we're very excited about the proposal that orton's brought to the table. we urge you strongly to move this forward so that they can get to work. it's actually quite strange to see these guys here in suits because usually they've got their sleeves rolled up, they're wearing their hard hats. they really want to get started because these buildings are very, very vulnerable. and we urge you to move this forward as soon as possible so they can get to work. thank you. >> thank you.

are there other speakers who wish to speak on item number 7? seeing none, public comment is closed. just a question to our city attorney with regards to the resolved clauses that would be added. would that require continuing this? >> it would not, those are nonsubstantive matters. >> thank you very much. on this item we do have those amendments to be made. just to the project itself. i have to say that this is actually a very exciting project, both myself and supervisor avalos have actually visited the site andstein what it looks like at the moment and can imagine what it can become in the future. and, so, it really is a very exciting project to see. in terms of the actual deal, i am very excited to see that we're going to be able to take $106 million off of the books in terms of the port's capital needs for a facility that we probably don't have another way to pay for at the moment. and that for that exchange, the port has to put in the $1 andth 5 million in addition to rent that we are foregoing.

but we're actually not collecting any rent at all at the moment anyhow on that facility. this is a good start moving forward. i'm glad we're put thing space to use. i love we're going to see exciting changes at the park and be able to see that transform and see this space actually utilized by the businesses that want to stay in san francisco. so, i think this is a l really a wonderful project to see going forward. so, i will be supporting this item. in terms of the $58 million, i am a little bit weary about that number. and i guess i don't have very much to be weary about yet, but i'm hoping when it does come back yet with the lease approval we will have title numbers and be sure we've done our due diligence on it. at the same time, if it is that number, it sounds like a very good deal to move forward just because we're going to be able to put that space into use, something we're not able to do at the moment. and, so, i would be very happy to support that item. so, do we have a motion to accept the recommended changes

that the budget analyst suggested and was read into the record and then to send the item forward with recommendation as amended? okay, we have that motion and we'll do that without objection. thank you. do we have any other items before us? >> that completes the agenda. >> thank you. we are adjourned. [adjourned] >> good morning and welcome to

the regularly scheduled meeting of the city operations and neighborhood services committee. i am sean elsbernd and i am joined by christina olague and we will be shortly joined by ms. carmen chu. mr. clerk, can you read item one. >> item one is issuance of on sale beer and wine license for mikhail brodsky for pectopah, llc located at 748 innes avenue. >> thank you mr. clerk. to the department. >> [inaudible] >> hold on one second. turn your mic on. >> thank you.

>> testing. good morning supervisor supervisors. i am from the san francisco police department. they have filed an application with the city and on cite beer premseses for 748 innes avenue. for the purpose of this hearing the california department of alcohol and beverage control seeks determination from the board of supervisors as to the approval or denial of this license. from the period of july 2011 through january 2012 there were no police calls for service, nor any police reports. the plat information located in here and 354 police actions for the calendar year 2010. the pemz premises is located in a high crime area and sensus track

listed here. applicant premises is not located in undue concentration area. there are no record protests with the california department of alcohol and beverage control and also no records of support with the department of the california alcohol and beverage control. department of recreation. there is no opposition from the station. alu recommends approval and recommended to the california alcohol and beverage control. number one, sales, service and consumption of alcohol beveraging shall be permitted between 10:00 a.m. and 12 midnight and off cite sales are strictly prohibited and have to maintain the area over the upon premises they have control. loitering is defined to stand

idle about without lawful business is prohibited to any property with the licensees as depicted on the form. number five. debris shall be removed from the premises within 74 hours of the application. if the graffiti happens on a holiday they shall remove it within 72 hours of the next weekday. the exterior of the premises shall have lighting and sufficient power to illuminate and make apparent the persons on the premises. additionally the position of the lighting shall not disturb the neighboring residents. number seven. no noise audible between the area of the licensee as defined on

the abc form. number eight, the interior lighting is sufficient to make easily discernible and conduct of all persons and patrons in that portion of the premises where the alcohol beverages are sold and consumed. thank you. >> no issues with the eight months of operation at this place since they have been going beyond the issues here? >> everything has been fine? >> yes. >> it's a very interesting business model. is the owner or the applicant here? no. any comment on this item? >> mr. yep -- >> yeah, i'm just waiting for the timer. i am used to

waiting for it. i am mr. yep and lived in san francisco for 50 plus years. this is a neighborhood i am familiar with especially at night and i am questioning since the city is on record for supporting small businesses why we're still issuing new beer and wine licenses? if i remember correct leeann earlier discussions here. >> >> at city hall there was going to be emphasis on trying to slow down the spread of these licenses, so if we're serious about supporting small businesses, especially in this area, maybe not issue it and this way give existing businesses, and also i think in the future when we have these liquor license statements i would also like to hear from

the district supervisor in the area where the license is being considered so this way we have some sort of district input from city government rather than just the police and the planning department, so i think if we're going to support small business in san francisco we should try to limit new issuances of beer and wine licenses so this way the existing businesses could -- in a certain sense flourish, and it also sends a message to the potential crime breakers that they don't have another place to hang out. thank you. >> thank you. any other members of the public? >> excuse me for being late. >> it's okay. come up. are you the applicant? >> yeah, i represent -- [inaudible] >> just a quick question. are you comfortable with all the recommendations made by the

police department? >> i didn't hear it, but i will hear it previous gentleman and i will tell you like specific type of our facility if you allow me. >> we read through the pack get we have a good sense of the operation that you run, and we heard you have no record and it's operating just fine. >> so this is closed facility. it's russian german center and only for members and we have kind of up scale client which is is not connected with the local crime, and other issues with hunter's point area, so we're trying to bring kind of different type of people to hunter's point and this, so -- yeah, and this is like our part of our tradition to have a beer

with a spa, so is there any question i need to answer here? >> i don't think so. >> all right. >> any other public comment on this item? seeing none public comment is closed. then unless i hear otherwise we will send this forward with recommendation with the attached conditions and can the department just make sure the gentleman gets a copy of the conditions he was unaware of, and that will be the order mr. clerk. can you please read item number two? >> to the board of supervisors to be considered a week from tuesday, next tuesday. >> [inaudible] >> you don't need to be here. next item please. >> item two is a hearing to consider the transfer of a type 57 on cite special license from 2100 market street to 550 montgomery street for ami arad for wingtip.

>> good morning supervisors. i am with the san francisco police department. the applicant filed an application with the california alcohol beverage control, abc, and seeking a general license for 550 montgomery street, tenth and 11th floors on the northeast corner of montgomery and clay street. this up scale private club will have a full service restaurant and operating on the 10 and 11th floors and currently open monday through saturday. for the purposes of this hearing the california department of alcohol beverage control seeks a determination from the board of supervisors as to the approval or denial of this license. this premise is located in plot one five zero. this plot had 355 police reports recorded for 2010. applicant premises is located in a high crime area.

this premise is located in census track listed here. applicant is currently located in an undue concentration area. there are no -- there is no record of protest with the california department of alcohol beverage control, and there is one letter of support with the california department of alcohol beverage control. no opposition from central police station. the alu recommends approval. no conditions have been requested from abc. thank you. >> thank you. is the applicant here on this one? sir. >> (inaudible). >> only if you have something you would like to share with us. >> it all sounds good to me. i did receive a call from ken on friday explaining the license. we currently have a club right around the corner e